Thousands of Pensioners face forced “Gap Year” because of Government inaction

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Dáil debate on pension “gap” year

Today in the Dáil, I raised the issue of the pensioners who will have no other option but to sign on the dole in 2014 because the Government has failed to align the new State Pension age with the retirement age attached to their contracts of employment.

The Government aims to save about €60 million in a full year following the abolition of the State Pension (Transition) next year.

The effect of this is that instead of a State Pension being available to certain retired people at 65, from next year these people won’t be able to qualify for a State pension until they are 66 yrs.

About 15,000 people who would have qualified for the Transition Pension next year, will not now qualify.

Based on claim patterns, about 2,000 of these will be in the position where they will have left work but have no entitlement to a pension. These figures would be expected to grow over the coming years because of demographic factors and because it is planned to further raise the State pension age to 67 in 2021 and 68 in 2028.

Most of these 2,000 workers will be in the position where they are forced to retire at 65 arising from long-standing contractual arrangements with their employer.

The effect of this is that about 2000 workers are being forced to retire but without any State pension to fall back on. In some cases they will be able to claim an occupational pension and in other cases they may be able to find alternative employment – but in many cases they will be simply left stranded.

It will mean that many will be forced to sign on the dole for a year in order to get income support. They will face the ridiculous situation where at the age of 65, after years of planning for their retirement, they face a “gap year”. They are considered too old to work by their previous employer but too young by the State to claim a pension.

And as a recipient of jobseekers benefit they will be subject to the same activation measures as people who are genuinely trying to get back into the workforce.

This won’t just be a problem in 2014. It’s a problem for every year after and will grow even worse as the retirement age is further extended.

In 2011, the Government was forced by the Troika to legislate to raise the pension age. I accept that there was nothing the Government could do about that. However, the Government has done very little since to address the anomaly that arose as a result of that legislation.

It is outrageous that the State would effectively turn its back on people who have worked all their lives and say “now that you’ve reached 65, you must go on the dole.” They are very much the forgotten pensioners, ignored by the two Departments responsible for labour law and pensions policy.

Both Departments need to produce a clear plan that deals with this anomaly and treats these pensioners with dignity and respect.